- After conducting an experiment, benchmarking firm Whiteblock deduced that the EOS token as well as its RAM market is nothing more than a cloud service for computation.
- The research also indicated the EOS token is built on a complete centralised premise and lacks some of blockchain’s key components like immutability.
- The tests were ordered by ConsenSys, a major blockchain entity. Its primary aim is to create metrics to benchmark base-layer blockchain protocols.
Whiteblock, a blockchain testing company claim they have made a startling discovery: EOS, a blockchain protocol valued at a staggering $4 billion just a few months ago may not be a ‘real’ blockchain after all.
How the Experiment was Conducted
EOS is different from Bitcoin and Ethereum in a lot of ways especially in how it decides who will validate blocks and get the rewards for doing so. EOS selects who processes the transactions (also known as block producers) using a complex voting process known as Delegated Proof-of-Stake.
In the elections, each EOS token held is equivalent to one vote. In other words, those who hold a lot of EOS have more say in terms of who controls the network. Whiteblock conducted the experiment by running an EOS replica, claiming it works exactly like the real thing.
The initial testing began in September, was held in an isolated environment, and continued for two months.
The firm claimed EOS functions more like a network that allows users computational resources stored in a “black box.” What’s even more damaging is the conclusion that the EOS system is built on a centralised and flawed model.
EOS Does Not Use Cryptography
According to Zak Cole, Whiteblock’s chief technology officer, all data related to transactions are stored by EOS in a kind of table called Chainbase. Chainbase was created and designed by lead EOS brain Dan Larimer.
When the EOS network confirms transactions, block producers will simply cross-reference new transactional data against the table. In other words, the legitimacy of the transactions are not confirmed using cryptography.
The research further indicated that: “All of these actions operate in an environment that lacks cryptographic validation of the contracts and transactions. EOS is fundamentally the same as a centralised cloud computing architecture [client/server] without the fundamental components of a blockchain or peer-to-peer network.”
The Consequences of Not Using Cryptography
The ability of network participants to validate transactions just by checking a special table has some undesirable downsides. Aside from the practice being unusual for a cryptocurrency, it also gives developers practically unlimited amounts of “undos.” This means EOS transactions can be reversed by block producers or anyone with access.
And there has been a lot of reported frozen EOS accounts and cases of reversed transactions. According to Cole:
“The ability to undo history (or anything for that matter) related to state is a notion that directly conflicts with the essential definition of what can be considered a blockchain, which is characterised by immutability of data.”